Replication of human immunodeficiency virus, type 1 (HIV-1) requires the function of a 21 kD nuclear protein, REV. REV mediates its function by interacting with a highly structured viral mRNA sequence, RRE (REV responsive element) of about 236 nt located in the ENV ORF and facilitates the nuclear export of viral mRNAs containing RRE. Purified REV bound RRE RNA in a sequence-specific manner. The critical functional elements of RRE fold into a structure composed of a stem-loop A formed by the ends of the RRE joined to a branched stem-loop B/B1/B2, between bases 49-113. Maintenance of the native RRE secondary structure alone was not sufficient for REV recognition. Mutations that changed a 5'..CACUAUGGG..3' sequence in the B stem without affecting the overall structure abolished both the in vitro REV binding and the in vivo REV response. Large quantities of biochemically active REV (2-3 mg/ 10-9 cells) were also expressed using a TK-vaccinia virus recombinant. Increasing amounts of NEF induced dose-dependent repression of virus production from provirus correlating with a proportionate decrease of all viral transcripts. Transcription from the LTR devoid of sequences between 159 - 340 nts (referred to as NRE) upstream of the mRNA start site was no longer suppressed by Nef. Stable T lymphocyte and HeLa cell lines expressing NEF were also shown to down-regulated LTR transcription and HIV-L replication. NEF expressing vaccinia virus recombinant was used to identify CTL response against NEF in 2 AIDS patients before onset of serological response to NEF or other HIV proteins. By peptide competition experiments, 2 major MHC class I restricted CTL epitopes were mapped. One, a 10-mer between residues 73 and 82, is a remarkably conserved domain among the different HIV isolates, though the overall sequence of Nef is highly variable. Six transgenic founder mice (FVB/N) bearing HIV-1 LTR-linked NEF were constructed. Adult transgenic mice developed persistent papillomatous skin lesions marked by follicular hyperplasia of the basal cell proliferation of the epidermis. Proliferating skin lesions expressed large amounts of NEF RNA and the 27 kD NEF protein. NEF mRNA and protein expression were absent or negligible in the unaffected regions of skin.